SunTrust Hunts Nashville Stars as Clients

How the private bank reels in up-and-coming musicians before they make it big.

By

Sonia Talati

Aug. 11, 2017 2:06 p.m. ET

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Nashville, one of the nation’s leading music meccas, attracts musicians of all genres, some still on the make, others already up on the billboards. So perhaps it’s no surprise that private banks are also heading into town, hunting for young artists before they make it big. City National Bank’s entertainment unit is among the banking franchises expanding in the area, while regional banks like Pinnacle Financial Group and Regions Bank have long worked Music Row’s lanes. SunTrust Private Wealth Management has similarly boosted its clientele in the music business by more than 20% in the last two years, claims Ashleigh Overly, the new managing director of the sports and entertainment group.

Nashville's Music Row
Illustration:
iStockphoto/Getty Images

SunTrust’s music-industry client base is largely built on big-name musicians with dozens of hit songs. Client wooing, Nashville style, often involves Overly and her team frequenting small venues where talented, young singer-songwriters are performing, to show their support. Or, they’re quick to congratulate the artists if they’ve signed a publishing deal with, say, a corporate SunTrust client in the music-industry business. They also, given the opportunity, provide the artists with friendly advice, such as who to pick as a business manager and how to open a business account, to help demystify finances for them. The key is to make the potential clients feel that “the door is always open,” she says. Overly’s hoping that it all helps the artist chose SunTrust, taking them on as clients when they still have modest bank account balances and betting that they will eventually make it in the industry.

To build the brand, the bank also partnered with Nashville Songwriters Association International, usually the first stop for new artists on their way to becoming successful songwriters, and gets invited to speak at their events. SunTrust sponsors events like Big Machine Label Group’s CMA Awards After Party, SXSW Music Festival, and various local golf tournaments. The point: Keeping talent aware of the bank’s name and 30-year legacy in Nashville’s music scene, Overly says.

Of course, SunTrust isn’t just after artists, but deep-pocketed producers, promoters, stadium financers, and music-publishing executives. Overly likes to “have many touch points that we can tap into—so we can offer very interesting opportunities.”

In other words, if you become a client, the bank doesn’t just make asset allocation recommendations and manage your money but, in certain circumstances, helps you further your business interests by tapping into its network of contacts on your behalf. Example: If a music-industry executive wants a private meet-and-greet with a successful artist-client on tour in Michigan, they can arrange it. Or if an executive at Sony Music, Warner/Chappell Music, or Concord Music Group wants a loan to purchase a music catalog, including a hit recording written by another SunTrust client, then the bank can provide the financing and introduce the two parties to each other.

The biggest issue with artist clients is that their cash flow is unpredictable and hard to manage over the long term. “Many songwriters have a fear of not having another hit,” says Overly. In order to gain financial stability, SunTrust bankers constantly urge the artists to stay on top of their expenses, so that they live within their means and all of their costs are covered by their incomes. Overly has them build a clear picture of what they want to happen in the next ten years of their life. Then, she typically advises them to start off with personal and savings accounts, along with a retirement plan.

Eventually, excess income should be tucked away into an investment account that will protect them from their downside risk—the lean years. Here, she says it’s wise, for example, to put a chunk of money into low-risk municipal bonds, which can also be used as collateral for a secured line of credit, if needed. She also gets them educated on LLCs; K-1 tax forms, which report income from trusts; and the appropriate types of IRAs that work best for their circumstances. She encourages the talent to work with their business managers—often granted power of attorney, but needing constant oversight—to make sure they have everything from music-touring logistics and cash needs well executed and the financial tools to stay on top of their funds.

One recording artist, who made it big on the radio, followed Overly’s advice early on, before becoming a success. He dreamt of going on tour, buying a home, and saving for his future children’s college education. So SunTrust started him off with basic personal and business accounts, along with a small loan to go on tour. As his wealth grew with his fame, he was advised to open an investment account, which he did, and eventually had the capital to invest in a property and fund his children’s education. The most financially successful artists, Overly notes, “work hard at their finances—and are very diligent.”

There’s a lesson here for everybody. “Pretend that tomorrow you’re not going to work again,” she urges, so that you constantly build a “rainy-day fund.” If nothing else, it can give you “a peace of mind that is remarkable.”

The security that comes with living within your means, whether you’re an artist or not, is worth its weight in gold.

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